This Article considers how far labor obligations in trade agreements extend into state regulation of national economies, and more specifically what it means for state action or inaction to be “in a manner affecting trade” so as to engage those obligations. This question is key to defining what potential issues labor chapters aim to address. It was central to the first trade dispute in the world involving labor obligations to be resolved by a dispute settlement panel, the Guatemala – Labor Obligations case. The panel’s decision was followed by agreement on a definition of this phrase in the revamped labor chapter that was key to reaching the new United States-Canada-Mexico Agreement. This definition may in turn have implications for the interpretation of many earlier trade agreements to which the United States is party. The literature to date treats the definition as correcting an interpretation in Guatemala – Labor Obligations that critics contend made proof of violation, and thus enforce-ment, unworkable. This Article maintains that this account is inaccurate, and that the extent of labor obligations in U.S. trade agreements can only be under-stood by more fully grasping their purposes, something about which the parties and the panel in Guatemala – Labor Obligations had relatively little to say, and which remains unsettled in policy debate and the academic literature. The Article develops a theory of labor obligation purposes that accounts well for their wording and structure and explains how the USMCA labor chapter may set normative ground rules for an integrated economic space to address systemic labor rights problems, rather than simply prohibiting and remedying particular failures to uphold labor rights with material effects on trade. With these purposes in mind, it might be arguable that labor chapters in previous agreements have an extent of obligations similar to that of the USMCA.

Continue reading Fit for Purpose? The Extent and Enforcement of International Trade Agreement Labor Obligations after the Guatamala – Labor Obligations Decisions